Retrospective CFAs and Success Fees
A retrospective success fee in a retrospective conditional fee agreement was not contrary to public policy.
BIRMINGHAM CITY COUNCIL v ROSE FORDE [2009] EWHC 12 (QB)
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A retrospective success fee in a retrospective conditional fee agreement was not contrary to public policy.
BIRMINGHAM CITY COUNCIL v ROSE FORDE [2009] EWHC 12 (QB)
CFA : RETROSPECTIVE CFA : SUCCESS FEE : RETROSPECTIVE SUCCESS FEE
The appellant local authority appealed against a decision on preliminary issues about costs in litigation with one its tenants, Ms Forde, the Respondent (“R”).
R had entered into a CFA with her solicitors in relation to proceedings against the local authority for failure to repair her property.
A short time before settlement of the proceedings the local authority had challenged the validity of similar CFAs.
R’s solicitors therefore wrote to her asking her to sign a second CFA.
The letter explained that the legal costs up to that date would be dealt with under the second CFA unless the court ruled it invalid, in which case they would revert to the first CFA; also, it explained, the second CFA contained a success fee, whereas the first did not.
The consideration expressed in and for the second CFA was that the solicitors would continue to act for R.
On 30th April 2008 Master Campbell decided that:
The local authority appealed to the High Court.
The local authority submitted on appeal that:
Christopher Clarke J held on 13th January 2009 that:
“In respectful disagreement with Master Campbell and Master Hurst [in Adam Musa King v Telegraph Group Ltd, unreported], I do not regard it as necessary to hold that a retrospective success fee is per se contrary to public policy. There is, in my view, insufficient warrant for effectively precluding solicitor and client from making such an agreement. In some, perhaps many, circumstances a retrospective success fee, or its amount, may be unreasonable, either as between the parties or as between solicitor and client. But this will not always be so. The Court has, in my opinion, enough weapons in its armoury, in the form of the criteria applicable on a detailed assessment and the provisions of the Costs Practice Direction and the Practice Direction on Protocols, to disallow or reduce retrospective fees that are unreasonable, as in this case.”
The court had the ability to disallow or reduce retrospective fees that were unreasonable. If that were wrong, there was no reason why the court could not delete the success fee leaving the obligation to pay unaffected. There was nothing in the statutory provisions requiring a retrospective CFA to comply with the notice requirements in reg.4 of the 2000 Regulations and no reason to conclude that the second CFA was invalid because the retrospection extended back to before the 2005 Regulations had been introduced.
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